NASA waiver to job competition rules brings in more outsiders

An exception to the standard procedures for public-private job competitions for new NASA research and development has resulted in an unusually high number of jobs going to contractors and other nongovernment organizations, according to a Government Accountability Office study.

Of 38 contests that NASA conducted under the special authority from fiscal 2003 to fiscal 2005, nonagency groups won about 89 percent, officials told GAO. In contrast, outside bidders won about 17 percent of all jobs placed up for competition governmentwide over the same period. A direct comparison is difficult because the percentage of contests, rather than jobs, won governmentwide was not available.

GAO's study (GAO-07-434R), looked at competitive sourcing at five scientific agencies -- the Energy Department, Environmental Protection Agency, National Institute for Standards and Technology, National Oceanic and Atmospheric Administration and NASA. Officials noted the unusual win-loss ratio for competitions carried out by NASA under an Office of Management and Budget waiver from the rules in the competitive sourcing rulebook, Circular A-76.

Under NASA's process, new work in research and development is posted to FedBizOpps, the government's Internet portal for business opportunities. The listings encourage bids from industry, academia and other institutions, as well as from within the agency. Expert panels evaluate the bids based on scientific merit and cost, and contracts are awarded to the bidder offering the best value in terms of both quality and price, according to the report.

During the period studied, NASA also completed two public-private competitions using the standard A-76 process, one of which was won by an outside team and one by the agency's in-house bidders.

At the other agencies studied, results more closely resembled the governmentwide experience, GAO reported. One agency, NIST, placed no work up for competition under A-76, citing a restriction imposed by congressional appropriators. Of seven competitions performed by the Energy Department during that period, in-house teams won six. Ten of EPA's 11 competitions went to the agency bidder and both of NOAA's two competitions went in-house.

Overall among the five agencies, not including competitions held under NASA's waiver procedure, the win rate for in-house teams was 86 percent.

Rep. Bart Gordon, D-Tenn., chairman of the House Science and Technology Committee, which requested the study, stressed the weak private sector showing overall. Of the 22 A-76 competitions held at the five agencies during the three years covered, "there were only three cases where the private sector was determined to be the most efficient at achieving agency goals," he noted.

Officials at the agencies told GAO that they expect in-house bidders to win the majority of new public-private competitions because most simple commercial jobs like cleaning and maintenance have been outsourced already. At NASA, commercial work has shifted to private contractors over the past 30 years, officials said.

Officials said much of the remaining work that is considered "commercial in nature" under OMB's rules is highly complex or relies on a deep understanding of agency operations.

GAO reported that Energy also used a special waiver to implement some competitive sourcing activities. Under that authority, the department compared results of two similarly sized competitions, one of which was completed under the standard A-76 rules and one of which used the General Services Administration's Federal Supply Schedules.

The department found that using the schedules expanded competition in the process. While the traditional competition received only one bid, from the in-house team, the schedule-based process received three bids, two of which were from the private sector.